RISI

Viscose pulp demand benefiting from Chinese government price supports for cotton

By Rod Young Tue, Oct 01, 2013

The Chinese government has been aggressively supporting domestic cotton prices since the third quarter of 2011. The cotton price in China (represented by the 328 grade) closely followed the A-grade cotton price benchmark from 2000 to 2009, with a small premium that averaged $80/tonne after adjusting for the 17% VAT on the 328 cotton price. The Chinese price continued to follow the A-grade price during the dramatic run-up over the course of 2010 and into early 2011; then, through the beginning of the equally-dramatic drop from that time.

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